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Does Goat-Grailed Deal Preview Resale’s Future?

Resale’s growth has been well documented in recent years, but as more players have popped up, the popularity of the segment appears to be driving consolidation.

Global sneakers, apparel and accessories resale platform Goat Group has acquired Grailed, a community-driven marketplace for men’s luxury, streetwear, sneakers and vintage fashion, for an undisclosed sum.

The cash and stock deal is expected to close in about 45 days and, until that time, the two companies will continue to operate independently. Grailed will continue to operate under its own brand and will integrate Goat’s operations infrastructure, which includes shipping and payments.

With the acquisition, Goat gains a greater influence over a burgeoning industry, particularly in the realm of luxury streetwear. In 2021, the U.S. secondhand market saw record growth of 32 percent, according to ThredUp’s latest annual resale report. It’s further expected to more than double by 2026 to surpass $82 billion. 

Goat initially spearheaded a $60 million investment in Grailed in September 2021 in an effort to serve its community of buyers and sellers, as well as enhance numerous features of its marketplace, including digital authentication, payment processing, merchandising and content.

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Starting as a footwear resale marketplace in 2015, Goat caught the attention of industry mainstay Foot Locker, which infused $100 million into the company four years later.

From there, the company launched its apparel and accessories offering, including streetwear, contemporary and luxury apparel. It says it has experienced “significant” growth in these categories, with order volume more than doubling in the last 12 months. Over the past year, the company opened retail and warehouse facilities in Singapore, Tokyo, and Shenzhen, China. In total, Goat has raised more than $492 million in funding and was last valued at $3.7 billion in June 2021.

The Grailed acquisition is designed to further accelerate growth in the apparel and accessories segments for the two companies, providing a deeper catalog of products and an expanded global community of enthusiasts.

Grailed’s marketplace was built “for enthusiasts, by enthusiasts,” and features products from brands including Supreme, Raf Simons, Gucci, Saint Laurent, Balenciaga, Prada and more. The company wants to make fashion accessible by offering a highly curated selection of resale pieces including inventory exclusive to the platform.

At the time of the initial investment, Goat Group CEO and co-founder Eddy Lu said his company and Grailed shared a common approach “based on authenticity, trust and a highly curated perspective on style,” all with the end goal to “bring the greatest products together from the past, present and future.”

In a statement after the acquisition, Lu reiterated that collective mission and described Grailed as “a leader in the men’s fashion resale market with a strong community of style enthusiasts. We have always admired what they created for the fashion industry, and we will continue to build upon their strengths and position as a leader in the space.”

The combined company will have more than 50 million customers across 170 countries.

“With its uncompromising brand identity, Goat Group is the perfect complement to Grailed’s cutting-edge community of fashion enthusiasts,” said Arun Gupta, co-founder and CEO of Grailed. “GOAT Group stands out in the industry as the right partner to help make fashion more accessible to the global style community.”

The Grailed acquisition occurred less than two weeks after one of the biggest U.S. resale platforms, Poshmark, got scooped up by South Korean internet search giant Naver for $1.2 billion.

Poshmark, which operates as a peer-to-peer social network of sorts for buyers and sellers, shares a common set of values with Naver, similar to the way Goat and Grailed’s commonalities. For Poshmark and Naver, the companies say they have a joint vision centered on content, community and empowerment. The acquisition also takes Poshmark out of the pressure of being a public company, where it has struggled to find its footing since the marketplace’s initial public offering in January 2021.

Last year, Etsy acquired U.K. resale marketplace Depop for $1.63 billion, before scooping up Brazil-based Elo7, a custom and made-to-order merchandise marketplace for $217 million.

The transaction is subject to appropriate regulatory approvals and other customary closing conditions.